Refer to the graph. The equilibrium for this economy is
A) at point a.
B) at point b.
C) at price level P $P _ { 2 } \text { and output } Q _ { 2 } \text {. }$
D) at price level P $P _ { 1 } \text { and output } Q _ { 1 } \text {. }$

Question

Refer to the graph. The equilibrium for this economy is
A) at point a. 
B) at point b. 
C) at price level P $P _ { 2 } \text { and output } Q _ { 2 } \text {. }$ 
D) at price level P $P _ { 1 } \text { and output } Q _ { 1 } \text {. }$

Quizplus · Accepted Answer

At equilibrium, the aggregate demand (AD) curve intersects the short-run aggregate supply (SRAS) curve. This occurs at price level P2 and output level Q2, which is represented by point b on the graph. Therefore, the equilibrium for this economy is at price level P2 and output level Q2.

Refer to the Graph P2 and output Q2. P _ { 2 } \text { and output } Q _ { 2 } \text {. }P2​ and output Q2​.

Refer to the Graph $P _ { 2 } \text { and output } Q _ { 2 } \text {. }$